.........Commenting on RBI (Reserve Bank of India) policy, the research note argues that RBI governor Dr Rajan is showing welcome signs of a hard-line approach to inflation control by prioritising CPI, rather than WPI. With CPI inflation in low teen territory, today’s WPI data, if anything, just cements the case that Dr Rajan will deliver his third repo rate hike in as many as meetings as governor at the December meeting. The research note concludes by saying, “the tacit agenda of the Rajan-led RBI remains to normalise real deposit rates and boost financial saving.” It is important that RBI ensures its monetary policy is sufficiently tight to re-anchor inflation expectations.
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